Why Choose Outplacement?
In 2016, Jenny was made redundant from her position as an Account Manager in a department restructure. “It was a really tough process,” she says. “I had been considering a career change anyway, but this made my search a necessity as opposed to a choice.”
It is a story that millions will be able to sympathise with. Recent economic conditions have unfortunately made redundancy commonplace. Research carried out by the Chartered Institute of Personnel and Development found that over the last four years over 2.7 million people have been made redundant in the UK alone.
That’s not just bad news for the employees involved. The cost to UK employers is estimated to be well over £28 billion. Even more shocking is that a study looking at the wider impact (which took into account the effect of these redundancies on overall UK economic output) puts the cost at a massive £130 billion, which is equivalent to over 9% of 2011 UK GDP.
These figures are massive, but even then they only tell part of the story. The increase in redundancies over recent years has meant that the stigma attached to those affected has been reduced greatly however the potential ramifications are significant and should never be underestimated.
Companies appearing to lack sensitivity or rigour when making redundancies risk opening an unexpected and uncomfortable can of worms. Feeling disillusioned by the treatment they have received, those staff who have been made redundant may seek redress through the courts or by publicly venting their displeasure in ways that could easily inflict damage on a companies reputation.
The impact on remaining staff can also be massive with productivity and morale plummeting in the aftermath if they perceive that their former colleagues have been treated unfairly or with disrespect.
In the face of such difficulties it is no surprise that most HRDs have thought long and hard as to how the redundancy experience can become more positive for both the individual and organisation alike.
In a lot of cases, outplacement (the steps a company take to help a former employee move on) has become a crucial aspect of a better redundancy model.
But if outplacement services are to be of benefit, which services should an HR department be offering? And if they do go down the outplacement route, how can they know that they actually work?
Telecoms group TalkTalk has had to address these issue over recent years. The company expanded rapidly and has found itself needing to simplify its organisational structure and cancel out the duplication of roles throughout it’s business. Three rounds of redundancies have resulted in more than 1,000 staff members leaving the company in the last few years and outplacement consultants were asked to provide specialist support.
“I’ve worked at organisations where the number one agenda item is how do we mitigate the cost of change?” says Tom Webber, HR Advisor. “But at TalkTalk we have values related to people and community, and when you are taking people through a period of change it’s good to be able to look them in the eye and tell them you are really trying to help. The right quality of outplacement helps people move along the change curve. It helps them realise the situation is for real and gets them through the denial stage quicker.” Webber goes on to add that having an outplacement partner on site who is able to reassure people that the process is normal is very helpful.
Mark Gatland, Chief Executive of Redundancy Matters, one of the UK’s leading outplacement providers argues that the benefits companies get from using an outplacement service far outweigh the up front costs. “Companies have come a long way in recent times. Redundancy used to be about saving money but over the last few years it has largely been about streamlining in order to improve business models and customer outcomes. If companies are to come out of the redundancy process in a stronger position then they have to safeguard both their reputation and the loyalty of the remaining staff.” says Gatland. “Unfortunately redundancy is a common occurance in the current economic climate and I don’t see that changing anytime soon. Companies have to realise that the way it is handled and the manner in which they treat their staff will define their futures long after the process has finished.”
Similarly to TalkTalk, Capita have recently made a large number of redundancies. Where applicable they have used outplacement service providers for affected employees. The service usually includes offering individual support in CV writing, career planning and career-transition guidance.
Unfortunately, there has so far been relatively little research done on outplacement and associated areas.
Dr Ian Ashman of the Institute for Research into Organisation, Work and Employment at the University of Central Lancashire published a fascinating study earlier this year called The Nature of Bad News Affects the Teller, which looks at the negative effects on line managers involved in the face-to-face delivery of downsizing initiatives.
Elaine Hopkins, wrote in her book Redundancy Sucks! An NLP Guide to Surviving and Thriving after the Axe: “In HR’s rush to get on the board they’ve lost some of the soft, fluffy people-management skills and become as functional as finance or facilities, I also think the CIPD doesn’t lead from the front on this issue and there’s an underlying assumption that redundancy will be negative.”
It is with that in mind that employers who are prepared to go the extra mile most stand to benefit from the redundancy process.
“Succesful outplacement programmes help to both protect and enhance the public reputation of the organisation,” says Gatland. “This then translates into the ability to recruit the best talent as there is an increasing trend for employees to make career decisions based on the ethos of their potential employers.”
Over the last few years however budgets have been tight so how can employers be certain that they are getting value for money if they invest in outplacement?
Gatland says “To start with they have to use outplacement consultancies who have the ability to deliver local services. Asking employees to travel significant distances in order to access the services will just irritate them and damage goodwill. It’s also really important to assess the quality of the individual consultants and to look at the level of one-to-one support that they can give to each employee.”
Outplacement has developed quickly and good providers will offer bespoke, flexible solutions. This means that costs can vary significantly based on a companies individual needs. Some providers will charge per head, others per day so it is important to make sure that you discuss your requirements in detail with any organisation that you are considering using.
Good outplacement is worth the money but assessing value is very difficult. Evidence will often be anecdotal. TalkTalk’s Webber says that ex employees can generally be “hard to contact” after redundancy, making it particularly difficult to get the full picture.
A recent TalkTalk outplacement programme however saw 60% of employees finding jobs within three months, with many others going on to travel or study.
Success rates in securing future employment can naturally be very hard to measure, but uptake of outplacement services isn’t. Redundancy Matters say that they are very proud of the fact that their take-up rate is 98%.
Also of vital importance is the impact that colleagues leaving will have on the remaining staff. Good quality outplacement support can be a real morale booster for them as well.
“Remaining staff can clearly see that their colleagues who have been made redundant were looked after. This leaves them free to focus on the business instead of looking over their shoulders and worrying about how they will be treated if they find themselves in the same scenario. It is also hard to overestimate the value of rebuilding any lost trust with remaining staff.” says Gatland.
Going forward, as Barry Hoffman , Group HR Director at Computacenter Group believes, outplacement providers will have to be more international in approach as more people have international careers.
Technology will also play a much larger role, and outplacement will have to become more streamlined in order to provide faster, bulk solutions
Gatland sees another unexpected advantage to working with outplacement providers: “ Because of their position, good outplacement providers have a unique understanding of the marketplace and this gives their clients the opportunity to use them as a future recruitment channel.”
Outplacement has come a very long way, from it’s origins in simply softening the blow of redundancy to it’s current position of helping to shape the future of the businesses it works with. Where it goes in the coming years is anyone’s guess but one thing seems certain…..It’s here to stay.
Reproduced with permission from The Guardian Newspaper Business Section